Thoughts on business ethics, corporate governance, risk management and compliance

Main menu

Post navigation

Does Change Obstruct Ethics?

The media regularly reports that organizations are paying huge fines for ethical breaches. Politicians, defence officers and CEOs are getting exposed in illicit sexual relationships. It appears that present day leaders don’t feel obligated to show professional and personal ethics. One is forced to contemplate did the world always lack ethical discipline? Alternatively, is it that the volatile and dynamic business and political environment has contributed to the decline in ethical values?

In my view, history has shown that during times of massive change in social and political environment ethical values fall. As the environment stabilizes, ethical behaviour increases. I will give you the reason why I think so. Before that let me share with you this beautiful verse from “The Lines of Experience” written by Je Tsongkhapa over 2000 years back.

Ethical discipline is the water to cleanse the stains of wrongdoing,

And the moonlight to cool the painful heat of the kleshas (disturbing/ angry thoughts),

It makes you stand out from the crowd like a great mountain.

By its force, you can tame all beings without intimidation.

Knowing this, great beings guard like their very eyes

The ethical discipline to which they are committed.

I, the yogi, have practised in this way.

You, who aspire to liberation, do the same!

1. Income Inequality

In the present day, corruption levels are so high that a person who stands up for ethics is considered an idealistic fool. Whistle blowers face high level of retaliation and social isolation. Instead of society valuing an ethical person, it stigmatizes the person. However, if you notice carefully, the corruption scams are bigger in the emerging markets than the developed world. Transparency International Corruption Index shows increasing corruption trend in the emerging countries and decreasing trend in the developed world. In the last decade, population of the emerging countries suddenly enjoyed a better standard of living of which they were deprived of earlier. Hence, the changing business environment has inclined them to pursue financial goals at the expense of everything else.

2. Gender Inequality

Look at the impact of change from another lens. Worldwide women are facing higher levels of physical and psychological violence from men. A recent survey showed that working women face twice the level of abuse than housewives. Why is that so? Reason being that working women are challenging the male domination and supremacy established for centuries. Previously, women were doing as they were told and the housewives are still doing so. However, the working women are torchbearers for change and demanding equality. Hence, they are paying the price. The bias is so clear. Half the world population consists of women and the organizations call hiring women a “gender diversity” initiative.

3. Social Inequality

If you look at racial, social and political equality movements, the picture is the same. The Arab world reported increased violence during revolutions. In India, the under privileged and lower caste people face dire situations and prosecutions for demanding equality. Even seeing the American history, whites increased violence against blacks after abolition of slavery. Hence, even when the conflict is initially non-violent, violence increases when the existing world order is threatened. Those holding beneficial positions in the old order get combative to continue the status quo and compromise human rights. Corporate sector reflects the same problems. White males ruled the business world. Now women and men of different racial communities are challenging their established supremacy. Can we really expect competitive business leaders to give up a superior position without a fight for the goodness of humanity?

In all the three examples, I have highlighted the compromise of human values when social changes occur. Presently, the world population is facing change at all levels. Global economy is in recession, China is threatening US supremacy, emerging markets will become economic leaders, people revolutions has shaken autocratic rules in many countries, technology has connected the global population and women are taking important roles in society. With the political, social and economic dynamics changing the world, can we really expect higher level of ethical behavior in this decade?

Closing thoughts

Change brings conflict. Unfortunately, human psychology is such that a person holding a different opinion, from a mere opponent becomes a tough adversary to enemy number one whenever our self-interest is threatened. Hence, in this dynamic environment expecting high level of ethics from business leaders is somewhat unrealistic. We tend to isolate business and expect organizations to have higher level of ethical disciple than the society around them. When business is a subset of society, how can business leaders portray values different from society.

Until the new world order establishes, ethics and principles would be put on a back-burner. This viewpoint is definitely not what the regulators wish to hear. What do you think?

Note For Readers

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, risk management advice, or other professional advice or services. Before making any decision or taking any action that may affect your business, you should consult a qualified risk manager. The author gives her permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at jaspal.sonia1@gmail.com